I have been contacted by many of my constituents in relation to this year’s Autumn Budget, especially around Amazon Tax, Local Councils and a possible tax rise to support the NHS.
This budget goes against the Prime Minister’s own words and shows that austerity is far from over. Schools, councils, the health service and the Police are all suffering. There are also no guarantees that the departments won’t face further cuts, and the Chancellor has raided capital budgets to fund day-to-day spending. The roll out of Universal Credit continues and the Secretary of State has admitted that some families will be worse off on Universal Credit than the benefits that they are already on.
The Chancellor has announced that he will implement a Digital Services Tax. The main aim of this is to get companies to pay their fair share of tax, which Labour will welcome. However, this looks more like another broken promise from the Government rather than action. A report from TaxWatch shows that in the last five years an estimated £5 billion of tax has been avoided by just the five big tech giants (Apple, Google, Microsoft, Facebook, and Amazon), this included £1.1 billion in the last year. The next step for the Government is to fully close that gap. This is where the Digital Service Tax should come into place but from the little we have seen of the detail so far it does not seem like it will achieve that.
Our high streets are struggling more than ever but the government continue to let Amazon pay a lower tax rate than British bookstores and other businesses.
The amount that is to be raised by tech giants paying tax is around £400 million, this is less then what the Government are hoping to get back from those who are self-employed, which is around £725 million.
Labour will give HM Revenue and Customs the resources and skills necessary to clamp down hard on those unscrupulous few individuals and companies who seek to avoid the responsibilities the rest of us meet. Which is why we will close down tax loopholes through our Tax Transparency and Enforcement Programme. What we won’t do is ask ordinary households to pay more. 95% of taxpayers will be guaranteed no income tax increases and no increases in personal National Insurance Contributions or the rate of VAT. The top 5% of earners, who are earning £80,000 +, will be asked to contribute more in tax to help fund our public services.
We will also renew our pledge to not extend VAT for food, children’s clothes, books and newspapers, and public transport fares.
Austerity is not over for Local Councils. The budget failed to undo the cutbacks that have stripped away local services, from bin collections to road repairs, and the loss of important community assets such as libraries, youth centres, Sure Start centres, and women’s refuges.
Labour believes in devolving power to local communities but without the necessary funding this is impossible. You cannot empower local government if you impoverish it.
Research from the Local Government Authority shows that Councils will face an almost £8 billion funding gap by 2025. By 2020, local authorities will have faced a reduction to core funding from the Government of nearly £16 billion since 2010. Next year, 168 Councils will receive no more core central government funding at all.
A Labour Government will give local governments extra funding. We will initiate a review into reforming council tax and business rates and consider new options such as a land value tax, to ensure local governments has sustainable funding for the long term.
Local Councils were the first target of the Conservative/Lib Dem Coalition Government in 2010, and have since endured some of the largest cuts in the public sector.
This budget shows that the Government are unable to tackle the much needed reform of social care. At the start of next year, as well as bracing for a further cut of £1.3 billion, which is 36% of their budget Councils will also need to find £1.5 billion next year just to keep social care running.
Figures from the Labour Party show that in 2017/2018 local authorities spent £816,554,685 over the budget on children’s services and social care due to growing demand. They were then forced to make cuts elsewhere and draw on reserves as a result.
NHS – Tax Rise
At the last election we pledged an additional £37 billion over five years. We are glad that the Government have finally listened and have put £20 billion more into our already struggling NHS, however, this is too little, too late. When Labour come into power £20 billion will be incorporated into our baseline.
Labour will then put more money on top of the Government baseline to take NHS funding increases to around 4-5% and we will do this by increasing income tax for the highest 5% of earners and by increasing tax on private medical insurance, and we will also free up resources by halving the fees paid to management consultants.
The Tories’ NHS funding settlement has once again been proved to be all smoke and mirrors. Instead of the pledged 3.6% NHS spending increase, according to Nuffield Trust the total Department of Health budget will rise by just 2.7% real terms in 2019/20.
The NHS settlement has once again failed to increase funding for public health, capital and workforce training. Public health budgets alone are set to be cut by £700 million between 2014/15 and 2019/20. We will boost capital funding for the NHS to make sure that patients are cared for in buildings and using equipment that are fit for the 21st century. We will also introduce a new Office for Budget Responsibility for Health to oversee health spending and scrutinise how it is spent.
Labour will halt and review the NHS “Sustainability and Transformation Plans”, which is currently looking at closing health services across England, and will ask local people to participate in the redrawing of plans with a focus on patient need rather than available finances. We will then create a new quality, safety and excellence regulator to be called ‘NHS Excellence’.
The next Labour government will reverse privatisation of our NHS and return our health service into expert public control. We will repeal the Health and Social Care Act, that puts profits before patients, and make the NHS the preferred provider. The Secretary of State for Health will also receive powers and overall responsibility for the NHS. We will introduce a new legal duty on the Secretary of State and on NHS England to make sure that excess private profits are not made out of the NHS at the expense of patient care.
I was extremely disappointed, but unsurprised, when the Chancellor announced that the Police will not receive any more money.
Police recorded crime is rising and Office for National Statistics says there is clear evidence that ‘low-incidence, high-harm’ crime such as gun and knife crime is rising sharply as well as sexual crime of all types.
This follows sustained austerity which has increased all the factors that lead to crime; poverty, deprivation, poor housing, school exclusion and lack of decent jobs for young people. In addition, the government has cut police funding in real terms by 30% since 2010 leading to cuts of 21,000 in Police Officer and decimation of support staff.